Cedar Rapids Continues Unprecedented Growth

Each year when I update exciting growth in Iowa’s second largest city, it is hard to imagine the pace can continue despite what we hear nationally about high interest rates, tariffs and inflation. Plus, this great city adapts after natural disasters to quickly recover and create a better place to work and call home.

Our latest national rankings reflect this effort, skill and dedication:

• No. 1 city for affordable housing in America (WalletHub, 2025)
• No. 3 best place to live in the Midwest (Spacewise, 2025)
• No. 12 best city for economic opportunity (U.S. News & World Report, 2025)
• No. 4 city with most affordable rent (WalletHub, 2025)
• No. 17 best city to buy a house in America (Niche.com, 2025)
• A top 100 best city for jobs in America (WalletHub, 2025)
• A top 100 best place to retire in America (Niche.com, 2025)
• No. 7 safest city in America (WalletHub, 2025)
• No. 33 best run city in America (WalletHub 2024, top 40 ranking since 2017)

In fall 2024, the City of Cedar Rapids was selected to participate in the Bloomberg Harvard Innovation Track as a continuation of the Bloomberg Harvard City Leadership Initiative yearlong Mayors Program. Only 27 mayors/cities in the U.S. were selected.

The Innovation Track is designed to help cities develop new ideas, created in collaboration with residents, to tackle city challenges. It is also a professional development program that helps develop innovation and human-centered design skills to apply to this program and throughout other work in the city. 

Since program kick-off in January, Mayor Tiffany O’Donnell and a cross-departmental team of city staff have been attending virtual learning sessions and in-person workshops to identify innovative approaches to build community connection and support economic vitality around the riverfront for current and future generations.

Engagement with community served as a key component of this effort. Through in-person interviews with community members, over 500 key quotes were generated and synthesized into 27 themes and seven insights.

Despite numerous recognitions, the city council’s June updated strategic plan kept its focus on seven key priorities: flood control, housing affordability, core neighborhoods, recreation and culture, homelessness, a clean and safe city, and business friendliness. All these areas are being actively addressed.  

In response to the historic 2008 flood, the city is aggressively working to complete its largest public project in history — a $1.3 billion flood protection system on the Cedar River. The project is 57 percent completed on the east side and 19 percent completed on the west side of the river.

To date, $413.6 million has been expended with currently 12 projects totaling $61.6 million under construction. The Corp of Engineers and FEMA have recognized our work to date that incorporates trails, attractive flood wall design and conversions of area on the west side into new parks that embrace the river.  

Another creative part of the system is the new $76 million 8th Avenue arched bridge that will start construction in 2027 with over $64 million of federal and state grants awarded. In July, the U.S. Department of Transportation announced a $25 million grant in the BUILD program that is for the westside flood system to support upgrades to infrastructure next to the new casino to prepare for the flood wall construction.

The award winning ReLeaf Cedar Rapids program to plant trees in public spaces and rights-of-way for 10 years continues strong after 697,000 trees were lost in the 2020 derecho. The city and residences/businesses have added thousands of trees with this effort, including almost 5,000 trees this spring by the city in public right-of-ways and parks.

The unique street concept Paving for Progress funded by a one cent sales tax has expended over $235.5 million on 390 projects in 11 years that improved more than 123 miles of the city’s streets. Seventy-one percent of expenditures were in residential areas and 29 percent on arterial streets. This year, 50 projects are underway totaling $30.4 million. 

The exciting highlight to this work is that the sales tax provides the cash funding, so no new general obligation bonds have been sold for street work in over a decade. Plus, 25 percent of sales tax revenue comes from surrounding city/county residents that purchase items while in Cedar Rapids.

Another public project success story is the Eastern Iowa Airport in Cedar Rapids that will complete its multi-year renovation and expansion in 2025. The total project cost is $141 million, using grants and airport revenue to finish debt free.

Now, some exciting project news that will have a major impact on future growth and resident opportunities:

• After a decade of efforts, Cedar Rapids was granted a casino gaming license in February 2025. Peninsula Pacific Entertainment and the nonprofit Linn County Gaming Association got the vote for a license. Construction has started on the $275 million, 110,000-square-foot facility in northwest Cedar Rapids adjacent to downtown and the Cedar River. The opening is planned for Dec. 31, 2026.

• A Google data center in southwest Cedar Rapids announced in 2024 is estimated to cost $576 million and is well under construction. Additionally in February, QTS of Virginia announced plans for a data center adjacent to Google. The investment is estimated at a minimum of $750 million, making it the largest private investment in Cedar Rapids history. Construction is underway on the first two buildings of a potential seven-building complex.

The City of Cedar Rapids, in conjunction with Alliant Energy, ITC Midwest and MidAmerican Energy, is prepared with adequate power and water to serve these data centers plus future growth of all types in the city. This data center construction has led NextEra Energy of Florida to apply to reopen Iowa’s only nuclear plant in nearby Palo, Iowa, to take advantage of the needs of these data centers as well as other anticipated growth in demand for electricity.

These new developments plus construction in our commercial and residential sectors has led to unprecedented building permit activity. Fiscal year 2025 just ended with 7,379 permits issued totaling an unbelievable $2.6 billion. In the last five fiscal years, permits have totaled $4.3 billion. The best news is this construction is in all sectors of the commercial market.

In addition to the future property tax, revenues, newly created jobs, utility usage and thousands of construction jobs over the next five years, the two data centers (Google’s six phases and QTS’s three phases) plus the casino will provide additional enterprise annual negotiated payments for 25 years that will total over $93 million. These payments will be utilized to fund important and long-term projects to benefit the Cedar Rapids community.

The City of Cedar Rapids is also participating in the construction activity in the local market with three major projects:

• Construction is underway on a $24 million, 40,000-square-foot library in southwest Cedar Rapids to replace a smaller leased space. The facility is oriented toward a new city park creating outdoor views for adults, children and community room spaces with access to these exterior spaces for library programs. Completion is scheduled for early 2026.

• The council approved phase I of a two-phase renovation of a two-story, 28,000-square-foot office building across from city hall, purchased in 2022, to house several city departments that have outgrown their current spaces. This $10 million annex renovation project will accommodate the city economic development team, city assessor and police department functions, including training, dispatch and other specialty units.

• Finally, the city has joined with the College Community School District and CR Metro YMCA to create a new wellness center for the Prairie Schools that serves six small adjacent towns as well as southwest Cedar Rapids. This $37 million, 95,000-square-foot facility will feature two pools, cardio/weight training, three basketball courts, an indoor track, fitness classrooms and a café. Construction is well underway with completion scheduled for spring 2026.

In addition, the Cedar Rapids Community School District is scheduled to begin construction later this year on two new and one renovated elementary school projects totaling $120 million. The school district is moving toward a $107 million bond issue vote in November to continue updating school facilities.

Retail is regaining life

The annual city officials’ May visit to the ICSC World Retail Convention in Las Vegas teaming with Retail Coach has led to positive updates on retailers wanting to be in the Cedar Rapids market. The largest new project is the 120,000-square-foot redevelopment of the former Sears space at Lindale Mall by Dick’s Sporting Goods into an expanded retail space and year-round multi-purpose outdoor area, spurring 110 retail jobs and a $25 million renovation. The existing 50,000-square-foot space a quarter-mile away is being marketed by the mall owners into two smaller spaces with six national retailers submitting initial letters of intent. 

Westdale Mall is continuing its rapid growth with the opening of Michaels and Five Below plus two other national retailers to be announced. Also under construction are freestanding Chipotle and B-Bop’s restaurants, Christian Brothers Automotive, 7 Brew Coffee plus 150 apartments. Other national retailers that are searching for sites or franchisees are Ollie’s Bargain Outlet, Smalls Sliders, Zaxby’s and Dunham’s Sports.

Existing retail spaces in the new mixed-use projects and strip malls are seeing more interest, but high financing rates are making that process more difficult. Vacancy rates remain constant in the 7 to 8 percent range with very competitive rental rates in the mid-teens for new spaces. However, the construction costs are making build-out surprisingly expensive for prospective tenants.

Office is starting to recover

Despite the lingering impact of the hybrid work model, we are starting to see more people return to the office environment. Vacancy rates remain at over 20 percent, but rental rates are getting more competitive. Hundreds of listings in both existing and new buildings are available to prospective tenants at rents of $6 to $20 per square foot.

Several new projects are in process as well as existing tenants taking new locations in downtown Cedar Rapids and other core areas:

• D.C. Taylor Co., a roofing company, is relocating its headquarters from its existing leased space to a new 33,200-square-foot office/warehouse in southwest Cedar Rapids. The $6 million investment is scheduled to break ground late this summer.

• The former Wells Fargo Bank building in downtown Cedar Rapids is being renovated into a LEED-certified office building. This $11 million investment in the 42,000-square-foot building will create headquarters for WSG Realty, a part of Skogman Realty, plus other office tenants potentially new to the downtown.

• Ahmann Cos. is developing a two-story, 22,000-square-foot office and retail building at its Fountains development. This $3.5 million investment will complete the last phase of this successful multi-tenant real estate development.

• South Amana-based civil contracting firm WRH Inc. purchased the 45,825-square-foot Geonetric office building, constructed in 2014, for $6.8 million. WRH will occupy one renovated floor to house its 35 member-headquarters team, with existing tenants consolidating on the other two floors of the three-story building.

The successful conversion of older office space in downtown Cedar Rapids continues with several other buildings being considered for conversion to housing.

Multifamily is very active

Multifamily is one of the strongest segments in our market, as demand fills new units quickly after construction is finished. Construction is in all four quadrants of the city as well as our core neighborhoods.

Currently, there are 57 projects under construction from duplexes to the largest 183-unit building. The total unit count from these projects is over 900, from studios to three-bedroom apartments. Some units are for sale, but most are for lease. The city has never seen this level of construction in a single year.

Vacancy rates are beginning to rise in older complexes, but this should go lower as the city and developers are monitoring leasing trends to ensure the market doesn’t get overbuilt. Also, with the influx of construction workers for the data centers, estimated in the thousands, older units should fill rapidly. 

Single-family housing starts in fiscal year 2025 was a very solid 125 units, as the existing homes for sale listings remain very tight. Affordability is still an issue, but more than 20 units are being constructed with CDBG funds and tax credits to allow them to be priced at $175,000 for those below the 80 percent area median income with price and income limits locked for a 15-year period.

Industrial continues strong

In addition to continued construction of spec warehouses of all sizes throughout the city plus the previously mentioned data center, several local industries are expanding or updating their facilities.

• International Flavors and Fragrances has started construction on a new 47,000-square-foot food-grade manufacturing facility at its existing plant in southwest Cedar Rapids. This $68 million capital investment will create 40 new jobs and serve as its U.S. facility of one of its major product lines.

• Ingredion Inc. located in downtown Cedar Rapids is investing $48.5 million to construct three industrial buildings to expand its starch making capacity.

Existing older manufacturing and warehouse buildings that become available for lease or sale do not remain long on the market as the cost of new construction remains high. Vacancy rates and rental rates have increased but are well below national levels.

My closing thoughts

Cedar Rapids has worked hard to create a business-friendly environment plus added community amenities to make the city a great place to live. Our area schools and colleges are expanding with new facilities and programs to provide a variety of educational opportunities.  Join us in the “City of Five Seasons” as you will find that “WELCOME” is our language.